Hungary axes internet tax after mass protests

People hold up their mobile phones as they protest against a new tax on Internet data transfers in the centre of Budapest October 26, 2014. (Reuters/Laszlo Balogh) / Reuters

The Hungarian government has shelved a proposed tax on internet traffic after mass protests gripped Budapest. Earlier they suggested capping it, but this half-measure didn't appease the protesters.

"This tax in its current form cannot be introduced. The
government wanted to extend a telecommunications tax, but the
people see it as an internet tax," Hungarian Prime Minister
Viktor Orban told public Radio Kossuth on Friday.

"If the people not only dislike something but also consider
it unreasonable then it should not be done ... The tax code
should be modified."

Orban’s government said it wanted to tax internet traffic because
the web has already overtaken taxed services in the
telecommunication industry and tax revenue should be due.

But opponents of the draft law saw it as a rip-off and an attack
on internet freedoms.

On Sunday, tens of thousands of Hungarians marched on the streets
of Budapest calling for the tax plan to be revoked.

In attempts to quell the protest, the government amended the
controversial legislation to cap the proposed law at about $3 per
month, but the protesters came back en masse on Tuesday.

Orban said his government would not confront such a strong
outcry.

"Today we are at a point where the technical tax modification
proposal we launched a few days ago caused such fear that it is
now impossible to talk these things over," PM said.

He added the government would return to issues of internet
regulation and taxation of online profits later next year, with
consultation to begin in January 2015.

Orban has implemented a number of controversial policies since
his center-right Fidesz party came to power in 2010. Extensive
reforms resulted in larger taxation of industries like banking,
retail and energy, nationalization of private pension funds,
tighter control over media and other measures.